(Reuters) - Ebay Inc’s (EBAY.O) forecast for current-quarter profit and revenue missed Wall Street estimates as the ecommerce company invests heavily to beat the rising competition from the likes of
EBay’s total operating expenses rose 16.1 percent to $1.44 billion in the first quarter. The company’s shares were down 4.5 percent at $39.11 in extended trading.
The company has been trying to woo shoppers by refurbishing the homepage of its website and making it easy for searches as well as by ensuring the authenticity of premium products that it sells.
“We are actively investing to build our product and capabilities related to intermediated payments and improving the customer experience,” CFO Scott Schenkel said on a post-earnings call. “We expect the level of investment to increase over time.”
EBay said it expects net revenue for the second quarter to be between $2.64 billion and $2.68 billion. Analysts were expecting it to be $2.69 billion.
The company forecast second-quarter earnings per share in the range of 50 cents to 52 cents per share. The midpoint of the range came in below the average analyst estimate of 52 cents.
In the reporting quarter, 171 million active buyers used the company’s website, missing the average analyst estimate of 173.4 million buyers, according to data and analytics firm Factset.
However, its gross merchandise volume — the total value of all goods sold on its websites — rose 13 percent to $23.6 billion, brushing past the analyst target of $23.1 billion, according to FactSet.
The company’s net income fell to $407 million, or 40 cents per share, in the quarter ended March 31, from $1.04 billion, or 94 cents per share, a year earlier when it booked a $695 million tax gain.
Revenue rose to $2.58 billion from $2.30 billion.
Excluding one-time items, the San Jose, California-based company earned 53 cents per share, in line with analysts’ estimates of 53.
Reporting by Arjun Panchadar in Bengaluru; Editing by Arun Koyyur